I received a letter from the IRS stating the claimed Recovery Rebate Credit was computed incorrectly. Does this mean I have to pay it back?
TurboTax has no way to know whether you received the 1st and/or 2nd EIP payments. When you prepared your tax return you were asked in the Federal Review section if you had received those payments. If you said you did not receive the payment(s) then the stimulus payment was put on line 30 of your tax return as a recovery rebate credit. The IRS cross checks every return with an amount on line 30. If the IRS sees that they already issued the EIP payment(s) to you then they adjust your refund or you even end up with tax due.
Check your IRS account---does the IRS say they sent you a payment that you did not receive? (If you filed a joint return you need to check for both spouses.) If so you can ask for a trace to be put on the payment.
If you were issued a payment and have not received it, see How do I request a payment trace to track my first or second Economic Impact Payments?
Hello! I am a TurboTax Live CPA. Like many things in tax the answer depends on how big your refund was and how much they want to adjust your refund. If the amount of the adjustment is greater than your original refund, then you would have a balance due that you would need to pay. If it is not, you would just receive a smaller refund after accounting for the adjustment.
**Mark the post that answers your question by clicking on "Mark as Best Answer"